Honda Motor Co. and Nissan Motor Co. are working toward finalizing a merger agreement by June, with discussions having begun on Monday, according to Japanese broadcaster NHK, citing an anonymous source.
The automakers plan to hold board meetings on Monday, followed by a press conference.
The two companies have been considering either a capital partnership or the creation of a holding company, as Nissan, in particular, seeks a financial recovery.
Declining sales and profits in the U.S. and China have led Nissan to reduce jobs, scale back production, and cut its annual profit forecast by 70%.
Initial negotiations were complicated by Taiwanese manufacturer Hon Hai Precision Industry Co. (Foxconn), which had shown interest in acquiring Nissan. However, Foxconn has paused its pursuit to monitor how the discussions between Honda and Nissan develop, according to a source familiar with the matter.
